2016 Index of Economic Freedom

Seychelles

overall score62.2
world rank76
Rule of Law

Property Rights50.0

Freedom From Corruption55.0

Limited Government

Government Spending62.0

Fiscal Freedom79.3

Regulatory Efficiency

Business Freedom66.0

Labor Freedom62.1

Monetary Freedom79.7

Open Markets

Trade Freedom83.4

Investment Freedom55.0

Financial Freedom30.0

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Quick Facts
  • Population:
    • 0.1 million
  • GDP (PPP):
    • $2.4 billion
    • 2.9% growth
    • 5.9% 5-year compound annual growth
    • $25,607 per capita
  • Unemployment:
  • Inflation (CPI):
    • 1.4%
  • FDI Inflow:
    • $228.7 million
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Seychelles, a remote, small island economy, has made a notable turnaround in restoring fiscal sustainability and laying some groundwork for more dynamic engagement in global commerce. In April 2015, two decades after first applying, the country finally became a member of the World Trade Organization. WTO accession underscores Seychelles’ progress in economic and political reform, particularly since the 2008 debt crisis.

Economic Freedom Snapshot

  • 2016 Economic Freedom Score: 62.2 (up 4.7 points)
  • Economic Freedom Status: Moderately Free
  • Global Ranking: 76th
  • Regional Ranking: 6th in Sub-Saharan Africa
  • Notable Successes: Trade Freedom and Monetary Freedom
  • Concerns: Rule of Law, Investment Freedom, and Financial Freedom
  • Overall Score Change Since 2012: +9.2

Despite progress, institutional weaknesses stemming from an inefficient legal framework and pervasive corruption continue to undercut the prospects for stable long-term economic development, hampering the emergence of dynamic private-sector activity other than in tourism.

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Background

The Seychelles People’s Progressive Front, now known as the People’s Party, has ruled Seychelles since 1977 when France-Albert René seized power in a bloodless coup. In 2004, René ceded power to Vice President James Michel. Michel was elected to a five-year term in 2006 and again in 2011. Seychelles enjoys a relatively stable economic environment as a high-middle-income country with lucrative fishing and tourism industries. Piracy has declined significantly as a threat off the coast. In early 2013, tropical cyclone Felleng destroyed hundreds of homes.

Rule of LawView Methodology

Property Rights 50.0 Create a Graph using this measurement

Freedom From Corruption 55.0 Create a Graph using this measurement

Concerns about government corruption have focused on a lack of transparency in the privatization and allocation of government-owned land as well as dysfunction in government finances, illegal procedures, and embezzlement. In August 2014, Seychelles was accepted as a candidate country by the Extractive Industries Transparency Initiative. Judges generally decide cases fairly but face pressure in high-level economic and political cases.

Limited GovernmentView Methodology

The personal income tax rate is a flat 15 percent, and the top corporate tax rate is 33 percent. Other taxes include an interest tax, a vehicle tax, and a newly introduced value-added tax. The overall tax burden equals 27.5 percent of GDP. Government spending amounts to 35.6 percent of GDP. The budget is in slight surplus, and public debt equals about 65 percent of total domestic output.

Regulatory EfficiencyView Methodology

Launching a business takes 10 procedures, and no minimum capital is required. The cost of completing licensing requirements has been reduced to about 25 percent of the level of average annual income. The inefficient public sector accounts for around 40 percent of total employment. Businesses complain that they are held back by the high cost of electricity, which results in part from cross-subsidies.

Open MarketsView Methodology

Seychelles’ average tariff rate was 3.3 percent as of 2013. State-owned enterprises operate in several sectors of the economy. Foreign investors may lease but not own land, and investment in some industries is restricted. The financial sector remains rudimentary. A large part of the population lacks access to formal banking services, and limited capacity for lending to the private sector inhibits growth.

Country's Score Over Time

Bar Graph of Seychelles Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Seychelles to other economic country groups Download Charts

Regional Ranking

rank country overall change
1Mauritius74.7-1.7
2Botswana71.11.3
3Cabo Verde66.50.1
4Rwanda63.1-1.7
5Ghana630.0
6Seychelles62.24.7
7South Africa61.9-0.7
8Namibia61.92.3
9Madagascar61.1-0.6
10Côte d'Ivoire 601.5
11Swaziland59.7-0.2
12Benin59.30.5
13Uganda59.3-0.4
14Burkina Faso59.10.5
15Gabon590.7
16Zambia58.80.1
17Tanzania58.51.0
18Senegal58.10.3
19Kenya57.51.9
20Nigeria57.51.9
21The Gambia57.1-0.4
22São Tomé and Príncipe 56.73.4
23Mali56.50.1
24Djibouti56-1.5
25Mauritania54.81.5
26Niger54.3-0.3
27Cameroon54.22.3
28Burundi53.90.2
29Togo53.60.6
30Guinea53.31.2
31Mozambique 53.2-1.6
32Comoros52.40.3
33Sierra Leone52.30.6
34Liberia52.2-0.5
35Guinea-Bissau51.8-0.2
36Malawi51.8-3.0
37Ethiopia51.50.0
38Lesotho50.61.0
39Angola48.91.0
40Democratic Republic of Congo46.41.4
41Chad46.30.4
42Central African Republic45.2-0.7
43Equatorial Guinea43.73.3
44Republic of Congo 42.80.1
45Eritrea42.73.8
46Zimbabwe38.20.6
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